disabled children

Earned Income Credit for Disabled Children

Earned Income Credit for Disabled Children

As the Earned Income Credit is a complicated part of filing taxes, there are many intricate details and special factors to take into consideration when applying.  For example, taxpayers that are disabled or have children on disability pay need to be aware of what benefits fall under the category of Earned Income.

The benefits from disability retirement count as Earned Income until the individual in question reaches the minimum age of retirement. Once that age is reached, the payments for disability convert to pension pay and cease to be related to the Earned Income Credit. There are also special distinctions for military disability pay, Social Security Disability Insurance and other payments that were received as part of a disability insurance policy (including those for which you paid premiums). None of these categories will automatically qualify for the Earned Income Credit and will only help you be eligible for this credit if you have other Earned Income. For children that have a disability, the regulations are similar to the previously mentioned child qualification requirements. The qualifying child has no age limit.

The only other criteria required are that the child cannot take part in gainful employment because of a mental or physical condition and that the condition will remain for at least one calendar year or that it can lead to the individual’s death.

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